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Trendic again votes in opposition

Ocean Pines Director Slobodan Trendic last Saturday said he was not yet ready to vote for the fiscal 2020 budget, in part because of its approach to paying back the deficit. Trendic made good on that promise as the lone dissenter to finalize the document.

By Josh Davis, Associate Editor

(Feb. 28, 2019) Ocean Pines Director Slobodan Trendic on Saturday said he was not yet ready to vote for the fiscal 2020 budget.

He made good on that promise, marking the third time in three years he voted against budget finalization.

“The issue I have basically goes to how we, as an association, are dealing with the $1.6 million deficit that was generated” during fiscal years 2017 and 2018, Trendic began.

He said Ocean Pines last year collected $71 per lot owner to pay down $600,000 of the $1.6 million balance. This year, Trendic said, the budget called for another $40 per homeowner to fund a further reduction of $340,000, “yet we have a half-million in payroll increases.”

“I just don’t subscribe to that kind of board approach to dealing with the deficit,” he said. “Is it necessary to do all this … so quickly? I don’t think so.”

He added, “The easiest thing to do is to increase taxes, increase assessments. It seems like we have adopted that government mentality.”

Trendic said he’d prepared a slide that outlined alternative cost-cutting measures, but Association Vice President Steve Tuttle said that was the first he heard of it.

“I appreciate you’re trying to help us with this. What I find troubling is, here we are at the 23rd hour – why haven’t some of these options come up before?” Tuttle asked. “You said you have a slide you want to show the board now – but why haven’t we seen that last week or the week before?”

Tuttle said departments, including aquatics and public works, already scrubbed their budgets for savings, as was evidenced by a presentation from Finance Director Steve Phillips earlier during the meeting.

Trendic countered that the board was simply “moving money around from one [department] to another.”

“It’s playing around with money, and I just don’t want to be a part of that,” he said.

Association President Doug Parks said it was “egregiously incorrect” to say there were no efforts to cut costs.

“The other part of it is, you guys know my philosophy about how much we should be in the operations,” Parks said. “The department heads [and] the GM … put the budget together and they present it to us for approval. They are far more well-versed in the intricacies of changing exactly what they need in their line items in order to run their operation.

“It’s not the board’s responsibility to go in here and say, ‘Well, take $10 out of that line and $20 out of that line.’ That is not oversight – that’s micromanagement,” he added.

Parks said the budget and finance committee advised against putting off the deficit recovery, adding it was “not really prudent” to look instead for hundreds of thousands in operational efficiencies to pay the balance down.

He said “a lot of good discussion” had occurred and “a lot of opinions” had been shared, but the board was now focused on finishing its job.

“I think we’ve got to the point where we’ve got enough information. Should there be some additional tweaking? Absolutely, but you could say that about any budget,” he said. “I think we are dangerously too close to meddling in specific operations … [which is] not what this board is supposed to be doing.”

Trendic continued to object and said he had pushed for a health care cost reduction a year ago and the directors agreed to do that over two years, starting with a 90-10 percent cost split with employees. Instead, he said, board members were on the verge of shifting to an 80/20 model in one year, but offsetting that with one-time payments so the difference “is basically a wash.”

“The entire 100 percent … is being given back to them in this form of a one-time adjustment,” Trendic said. “We, in essence, are not doing what we said.”

Parks said that was a valid point, but the board had the opportunity to “put this to bed right now.”

“We know we want to get to 80/20. We have an opportunity to get to 80/20. We have a mechanism in this year to make the staff not have to fully bear that 20 percent,” he said. “Quite frankly, I don’t want to squander an opportunity to make this [change] now.”

Trendic next veered into payroll.

“We have a fundamental problem and the problem is called payroll. Over 50 percent of our revenue is in payroll,” he said. “Last year to this year, payroll is increasing … about 10 percent.”

Trendic said the board was asking for homeowners to “pay … for the mistakes that have been generated by the board and by the management of this association.”

“If this $40 this year passes, we will have collected $950,000 from the homeowners, yet we haven’t really done much on the other side of the equation,” Trendic said, adding there would not be a hit to association credit ratings if the deficit repayment were postponed.

“My point is, roll it another year, leave that million dollars [deficit], let’s see if we end up with a surplus,” Trendic said. “Wouldn’t that be nice, for a change … to have a profit at the yacht club, instead of budgeting for $100,000 loss?

“Why don’t we focus on getting everyone involved to bring [a] better performance where the performance needs to be improved? That’s basically what I’m asking for: make tough decisions, eliminate payroll adjustments [and] freeze salary raises if needed,” he continued.

“We’ve been elected to make tough decisions. Do you think it’s fun sitting here and getting praises and also complaints from homeowners? It’s not – it is really not,” Trendic said. “I think all of us are doing the best that we can. We do have to make some tough decisions and I’d like to suggest … if we’re not willing to agree on this, I believe we don’t have a budget that I feel comfortable voting on.”

Others indicated the task was not so daunting.

Director Esther Diller said she was “not happy with the assessment amount that we have,” but added, “At this point, I don’t know where we can cut it anymore.”

“We’ve been beating this to death for six weeks,” she said. “I don’t know if we’re going to get any further.”

Director Ted Moroney said the board needed to vote and that he was largely in favor of the latest budget draft presented by Finance Director Steve Phillips.

Association Treasurer and Budget and Finance Committee Chairman John Viola said he stood by committee recommendations given over the last six weeks.

He added, “I don’t know what else I can say right now without it making the front page of the papers, but you all need to vote on this.”

The directors introduced two final changes to the budget, removing $72,000 earmarked for pay raises and adding $25,000 for an executive search for a new general manager.

Trendic attempted to cut the deficit collection to $20 per homeowner, but it was not accepted.

The final budget was approved 6-1, with Trendic dissenting.